Okay people, there are several completely independent issues that are being discussed here. Please, please do not mix them together; doing so can only lead to confusion. It will never lead to a productive solution to any of the problems involved here.
First off, I'll tackle the issue of pervasive DRM, which most people here seem to have ignored. Pervasive DRM is a very, very bad idea. This has absolutely nothing to do with piracy, morality or, copyright law. It doesn't even have to do with the many poorly implemented DRM schemes which have caused all kinds of problems for legitimate software consumers. Rather, it has to do with the nature of computers.
Computers are general purpose computing platforms. The basic functionality they provide is a set of hardware capable of complex arithmetic, and an interface that allows a user to create programs that utilize that hardware. On top of that, most users layer some sort of operating system for abstracting properties of that hardware (this allows the same program to work on machines with different chipsets; recoding every time Intel releases a new chip is no fun). We also use fancy compilers so we can write in high level languages, instead of machine code (which, again, changes by architecture, and is again no fun).
The point is, though, that I can make my computer do whatever I want. If I want to write a simulation of a big physics problem, I can write a program to do that, and run it on my computer. This is great; computing the simulation by hand would take me lifetimes, but my computer can do it in hours. Computers were originally scientific tools, and some of us still use them that way.
There are other platforms out there which are not general purpose, though. For example, gaming consoles do not have interfaces that allow users to write their own programs. While you may be able to hack your console, they are expressly designed to make this as hard as possible. Consoles are fine for playing games, but that's it. I can't run a physics simulation on my console.
This brings us to total platform DRM. Let's say that Intel and Microsoft decide to team up. Intel makes computer chips which, rather than being general purpose computing devices, will *only* run Microsoft Windows X (let's leave aside for the moment the feasibility of this design). And Microsoft makes good and sure that Windows X will *only* allow software that is cryptographically signed by a manufacturer in their online database to run. Great; now you have a platform where DRM is unbeatable. This is the only way to make such a platform. Any platform which allows the execution of arbitrary, user specified code will never allow the creation of programs which cannot be cracked by sufficiently motivated individuals.
The trouble is, what you have when you're done is not a computer any more. It's a console. It's a fun device that you can use for consuming various sorts of media, which will be provided by Microsoft's partners (Microsoft decides what can run, remember?). Anyone who's not an official Microsoft partner is out of luck. I can't run my physics simulation, because it's not validated by Microsoft. Likewise, any software vendor competing with Microsoft is completely at their whim. But of course, we all trust the good intentions of Microsoft, right?
Now, I'm not saying that consoles don't have their place, though personally I've never owned one, in part for this very reason, and in part because I prefer strategy games over shooters. But as a computer scientist, I'd be awful sad to see total DRM, because it would be the end of the personal computer as a general computing platform. If the cure for software piracy is the elimination of the PC as we know it, then the cure is worse than the disease. In the end, I don't want some corporation telling me in absolute, arbitrary terms what I can and can't do with my computer.
Now, the issue of copyright is a separate one. Legally, I think that the copyright system needs a major overhaul. The idea behind copyright is a sound one, but the current implementation does not accomplish that idea. In many cases, it does the opposite. Exactly what reforms need to be made to copyright law for it to serve its intended function (and I would point out that its intended function is listed in the United States Constitution as, "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries") is debatable, and beyond the scope of this discussion. Whether the term is 3 years or "forever by intervals" as Disney would prefer, it doesn't affect the piracy of new games.
Here, we again must disambiguate the moral and the legal sides of the issue of "piracy" which are so often jumbled together. Comparing the two is a classic case of apples and oranges. Statements like "act X is morally equivalent to legal construct Y" are practically meaningless. Comparing the morality of actions to other actions is fine, but don't get legal constructs mixed in. Also keep in mind that legal constructs do not have infinite moral value in all cases (there have been many immoral laws in human history, from Separate but Equal to the laws of Nazi Germany regarding Jews). Likewise, there are plenty of things which most people would agree are immoral, but are legal. This is what makes the arguments about piracy being or not being theft so messy.
The actual legal issues involved in software piracy are relatively straightforward. Using a copy of a program which you have not payed for is legally exactly equivalent to making a photocopy of a book. It is a violation of copyright law, and hence not legal. It is not petty larceny or grand larceny (commonly called "theft"), as both of these are quite specific in describing the taking of physical property owned by someone else without their consent. As no physical property is involved, software piracy is not larceny, it is copyright violation.
The moral issues involved are far more complicated, and there is no clear cut answer. Various parties will try to tell you that there is one simple solution. Though they may vary on what that solution is, it is never practical, and it is almost never moral or in the best interests of society.
There are very good reasons for discouraging piracy; artists need compensation if we want them to produce art. I enjoy many forms of art, ranging from computer games to live performances of opera. In every case, I understand the need to compensate the artists for their time and their creative energies.
The trouble is, there is a perception that most of the money we pay for off-the-shelf media products is not going to the artists who created the media. The even more troubling thing is that this perception is frequently, though by no means always, correct.
In this respect, my perception is that the computer gaming industry is at least somewhat better than the music recording industry, in which artist are essentially trading away the right to make money off their music in exchange for wider distribution. Most of the issues with piracy are related to people feeling like they are simultaneously being over-charged for media that costs cents to produce physical copies of *and* not effectively supporting the artists that created the work.
There are two ways that piracy can be reduced. The first is to make stricter laws and build more prisons and give up all rights to privacy (Microsoft owns your computer, remember? That means they can monitor and record anything and everything you do on it). The second is to change the perception that consumers are being overcharged and money isn't going to artists.
Personally, I prefer the second method, since the first sounds like a great way to wind up living under a totalitarian police state. What's more, I think many artists would agree with me. The most vocal objections come not from the artists, but from corporations who profit from works of art they did not create. I think Stardock has been doing a great job of trying the second method, and I think it's worked pretty well for them. By maintaining a good dialogue with their users and continuing to support and improve their products, they help create the perception that the user is getting his or her money's worth. They also have the advantage of being a small company which the artists actually work for directly. This helps give people the feeling that the folks making these great games are actually getting some of the money we're paying for them.
I for one devoutly hope that Stardock will continue to be a force against piracy by the same methods that they have used so far. I compliment them on their efforts, and I encourage them not to be discouraged by the fact that piracy still exists. As long as computers are open platforms, piracy will exist in some measure, but if the number of pirates is small enough, it won't impact the bottom line significantly. The way to reduce the number of pirates is to give users a sense that their money is being well spent, not to punish the loyal customers by saddling them with lots of DRM.
